In a dampener to government efforts to rein in the price spiral, overall inflation inched up a tad to 8.31 per cent in February from 8.23 per cent in the previous month, driven mainly by high food and fuel prices.

In this scenario, especially when global commodity and oil prices are ruling at a high, it is almost certain that the Reserve Bank of India (RBI) will opt for yet another hike in key short-term lending and borrowing (repo and reverse repo) rates by at least 25 basis points each during its monetary policy review slated for March 17.

Finance Minister Pranab Mukherjee, however, viewed that monthly variations in inflation numbers do not present the correct picture and hoped that the WPI (wholesale price index)-based headline inflation would come down to the 7 per cent range by the end of this fiscal. “By March-end, it would be possible to have around 7-7.5 per cent [inflation],” Mr. Mukherjee told the media here.

The WPI data showed that even as headline inflation at 8.31 per cent in February was marginally higher than 8.23 per cent in January this year, it was much below its level in February last year when it was pegged at 9.42 per cent.